Meet the "bailout" bill: GOP brands financial regulation

ABC’s Z. Byron Wolf reports:

If you thought Republicans were effective at demonizing the health care bill, branding it as a “government takeover,” just wait. You’re about to meet the bill Republicans will brand as simply a “bailout.”

If there’s one thing just as unpopular as government takeovers, it would have to be bailouts.

Senate Minority Leader Mitch McConnell used variations on the term “bailout” to describe Democrats’ proposal no less than 20 times in remarks on the floor of the Senate this morning.

McConnell gave the “bailout” speech less than an hour before he is scheduled to meet with President Obama to start discussions on regulatory reform.

“The American taxpayer has suffered enough as a result of the financial crisis and the recession it triggered. They’ve asked us for one thing: whatever you do, they said, don’t leave open the door to endless bailouts of Wall Street banks. This bill fails at this one fundamental test,” said McConnell, who voted for the TARP bailout of Wall Street in 2008.

There are clear parallels here to the health reform bill. Long before August last year, in the Spring, Sen. Mitch McConnell began criticizing Democrats’ health reform proposal in daily speeches on the Senate floor even as bipartisan negotiations were going on behind closed doors at the Senate Finance Committee.

Today those bipartisan negotiations are going on at the Senate Banking Committee. McConnell first turned his sights on regulatory reform yesterday, as we reported then.

And McConnell drew the comparison too.

“The White House has been clear. It plans to take the same approach on financial reform that it took on health care — put together a partisan bill, then jam it through on a strictly partisan basis,” he said.

McConnell also got specific, citing the creation in Dodd’s bill of a $50 billion fund, set up with bank fees, that would be used to keep too-large banks from failing. He said this would create a tacit government bailout promise to bail out large failing banks and their creditors.

He also criticized: ? new lending authority for the Federal Reserve ? an advisory board that would be set up to identify structural weaknesses like the one created by insurance giant AIG with credit default swaps in the years leading up to the 2008 financial crisis. McConnell said the board would be give “unaccountable bureaucrats and self-appointed wisemen in Washington even more power to protect, promote, or punish companies at whim.”

“If you need to know one thing about this bill, it’s that it would make it official government policy to bail out the biggest Wall Street banks,” said McConnell.

Democrats and the White House, certainly, would disagree.

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